Wind Energy Boosts Big Companies

Corporations are meeting sustainability goals by building wind energy farms.

As the wind industry continues to rebound from its slowdown in early 2013, direct investments in wind power projects are accelerating as major companies look for low-cost, sustainable ways to fuel future growth, while meeting ambitious environmental goals.

“Two big trends have emerged in recent years,” says Lindsay North, media relations and outreach manager, American Wind Energy Association (AWEA). “As a direct result of technological enhancements and bursts of policy certainty, the cost of wind power has been driven down by over 40 percent in the last four years. Utilities are recognizing how affordable wind can be and are pursuing long-term contracts for wind energy all around the country.”

On the private sector side, she says, the environmental benefits of wind power are making it increasingly advantageous for companies with sustainability or carbon reduction targets to get involved in building wind farms.

On the private sector side, she says, the environmental benefits of wind power are making it increasingly advantageous for companies with sustainability or carbon reduction targets to get involved in building wind farms.

One of the most visible pioneers in this activity is Google, whose direct involvement in the wind energy sector is part of the company’s intention to eventually power its operations with 100 percent renewable energy.

Last fall, Google agreed to purchase the entire output of the 240 MW Happy Hereford wind farm outside of Amarillo, Texas. With this project, Google has now contracted for more than 570 MW of wind energy, enough energy to power approximately 170,000 U.S. households. The wind farm, expected to start producing energy in late 2014, is being developed by Oklahoma-based Chermac Energy Corp. to provide energy to the Southwest Power Pool (SPP), the regional grid that serves Google’s data center in Mayes County, Okla.

The structure of the agreement is similar to Google’s earlier commitments in Iowa and Oklahoma, where due to the current structure of the market, the data center can’t consume the renewable energy produced by the wind farm directly. After purchasing the renewable energy, Google will retire the renewable energy credits (RECs) and sell the energy itself to the wholesale market. Any additional RECs produced under the agreement will reduce the company’s carbon footprint elsewhere.

Previous wind projects backed by the company include: the 845 MW Shepherds Flat project in Arlington, Ore.; a $75 million, 50 MW wind farm in Greene County, Iowa; a $200 million investment in the 161 MW Spinning Spur Wind Project in Oldham County, Texas, and an agreement with Oklahoma utility GRDA for 48 MW of wind energy from the Canadian Hills Wind Project.

Another tech heavyweight committed to operating more of its data centers with renewable power is Microsoft, which recently signed a 20-year PPA to buy wind energy in Texas.

Funded in part by proceeds from Microsoft’s “internal carbon fee,” the agreement with RES Americas will see Microsoft purchase all of the energy from the Keechi wind project, a 110 MW wind facility 70 miles northwest of Fort Worth.

“As the market for cloud services continues to grow, our business will become increasingly more dependent upon energy,” says Josh Henretig, director of environmental sustainability, Microsoft. “Consequently, we are pursuing investments in both utility-scale and distributed solutions that will insure that Microsoft has greater control over the supply of low-cost, sustainable energy.”

Although wind from Keechi will not power Microsoft data centers directly, the San Antonio data center draws from the Texas power grid, and once operational in 2015, Keechi will contribute wind-generated electricity to this same grid, reducing the overall amount of emissions associated with operating these facilities.

“We recognize the importance of creating a market signal to direct more investment toward renewable energy in locations where we have data centers. Signing a long-term PPA does precisely that by increasing demand for wind energy in Texas,” Henretig says. “Over time, we’re hopeful that projects like this one will continue to increase the amount of renewable energy on the electric grid, raising the overall share of clean energy that powers the cloud computing services supported by our data centers.”

Retailers Get Into Renewables

Joining Google, Microsoft and other tech giants, large-scale retailers such as Walmart Stores Inc. are stepping up their commitment to renewable energy and wind power production.

“In 2005, Walmart publicly set out several sustainability goals: to be supplied 100 percent by renewable energy, to sell products that sustain people and the environment, and to create zero waste,” says Chris Schraeder,senior manager of sustainability communications, Walmart. “We haven’t reached those goals yet, but they’ve definitely become embedded in the way we do business.”

After setting up 350 stores to receive up to 15 percent of their electricity needs from Duke Energy’s wind farm in Notrees, Texas, and installing 12 mini wind turbines to power a Walmart store in Worchester, Mass., the company partnered with Foundation Windpower in 2012 to develop its first onsite large-scale wind turbine in Red Bluff, Calif., to provide as much as 20 percent of the electricity needed to run the company’s nearby distribution center.

“We are using every tool in the tool box as we work toward our goal to be supplied by 100 percent renewable energy, and wind energy is an attractive technology for Walmart,” said Greg Pool, senior manager of renewable energy and emissions at Walmart and project manager of the Red Bluff installation, in a public statement. “We found the perfect environment for an installation with the Red Bluff project — good wind conditions and open land that we own. As a result, we expected to reduce our energy costs from the day we flipped the on switch. Should the technology at Red Bluff prove successful, Walmart will evaluate the potential for large-scale turbine installations at other distribution center sites in the United States.”

An additional outcome of such investments is that by building wind facilities outright or contracting to purchase significant amounts of renewable power for long periods, industry leaders such as Walmart and others are giving wind farm developers the financial certainty to build additional clean energy projects, Schraeder points out.

“What’s really exciting about Red Bluff is that as our first industrial-scale wind turbine, it’s helping us figure out how to use our power as a purchaser at scale and bring down the cost of technologies over time,” he adds. “Driving the actual production or procurement of renewable energy is important not only to our business, but to those industries that are providing that power.”

“Investing in the Pincher Creek wind farm is part of IKEA’s broader commitment to be ‘People & Planet Positive,’ which means inspiring and enabling millions of people to live a more sustainable life at home, and taking the lead in creating a better life for people and communities impacted by our business. Energy independence by the year 2020 is one component of that vision, and it means that we will produce more renewable energy than the energy we consume worldwide.” – Brendan Seale, sustainability manager, IKEA Canada

Similar goals are the driving forces for Swedish retailer IKEA, which in 2013 became the largest retail wind energy investor in Canada, thanks to its backing of a new 20-turbine wind farm in Pincher Creek, Alberta.

“Investing in the Pincher Creek wind farm is part of IKEA’s broader commitment to be ‘People & Planet Positive,’ which means inspiring and enabling millions of people to live a more sustainable life at home, and taking the lead in creating a better life for people and communities impacted by our business,” says Brendan Seale, sustainability manager, IKEA Canada. “Energy independence by the year 2020 is one component of that vision, and it means that we will produce more renewable energy than the energy we consume worldwide.”

The complex will be IKEA’s second-largest wind farm and the first owned by the company outside of Europe. Its 46 MW array — to be constructed and operated by Mainstream Renewable Power — is expected to generate 161 million kilowatt hours, equivalent to the electricity use of 32 IKEA stores, 60 percent of total IKEA electricity consumption in North America, or eight percent of total IKEA electricity consumption, Seale notes.

Incentives Align

Uncertainty at the federal level may create a short-term barrier to the development of new utility-scale wind projects, yet market forces are now playing a stronger role in establishing wind farms and providing additional benefits to producers and consumers alike.

“We’re seeing more companies set sustainability goals for a variety of reasons and we don’t see any reason that will stop,” North says. “Increasingly consumers want to know what type of energy helped produce a particular product and they may be more inclined to purchase something that was produced with renewable energy. If that continues, more businesses will be buying wind power in the coming years.”

“For Microsoft, signing a long-term PPA for wind energy is a significant milestone in our commitment to carbon neutrality. It also underscores how our carbon fee is changing the way Microsoft does business globally,” Henretig says. “By placing a dollar value on a metric ton of carbon, Microsoft is building environmental sustainability into our long-term business planning and creating a blueprint for more purchases of renewable energy like the one at Keechi.”

“Energy is typically one of the largest expense lines for manufacturers and retailers, so effective energy management is a great way of creating positive environmental outcomes, while also being a smart business practice,” Seale says. “Being a generator of energy provides us with a more stable cost picture moving forward, and we in turn will pass on those benefits to our customers in the form of high-quality home furnishings at low prices — which is what we do best.”

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